RUSHB
Rush Enterprises, Inc.
$64.38
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 52.4% below fair value
You pay
$64.38
Bear
$98.13
Fair
$135.33
Bull
$171.32
Bear
$98.13
+52.4%
6% stage 1 growth, 11% discount
Fair
$135.33
+110.2%
9% stage 1 growth, 11% discount
Bull
$171.32
+166.1%
12% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (9% base case)
Terminal Value % of EV
38%
Implied Market Multiple
11.1x
Summary
Using a two-stage FCF DCF with 9% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $135.33 per share.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions